CMES and PetroChina unit conclude 25-year lease deal for two LNG carriers
CMES and PetroChina unit conclude 25-year lease deal for two LNG carriers - Offshore Energy
CMES and PetroChina unit conclude 25-year lease deal for two LNG carriers
China Merchants Energy Shipping (CMES) has signed a long-term transportation agreement with a subsidiary of PetroChina for two of its LNG carriers under construction.
According to a stock exchange filing, CMES signed the agreement with China Petroleum International (Hong Kong) on November 7, 2023.
Under the agreement, CMES will lease two 175,000 cubic meter LNG carriers to PetroChina’s subsidiary for a period of 25 years, starting from the vessels’ delivery date.
Financial details of the deal were not disclosed; however, CMES stated that the rental price is determined based on the current market freight rate of third-generation LNG ships.
The two LNG carriers covered by the contract were ordered by CMES in December 2022 at China’s Dalian Shipbuilding Industry Company (DSIC).
At the time, the company planned to allocate up to $235 million per vessel, pushing the total to $470 million.
CMES said that the vessels are expected to be delivered in the second half of 2026 and that they would be equipped with dual-fuel LNG main engines and energy-saving technologies to meet the latest emission standards when operating both in fuel and gas modes.
According to the company, the order was in line with the development fleet strategy and expansion of low-carbon business and clean energy transportation.
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.